In a letter to the Pentagon, Northrop Grumman's (NYSE: NOC) CEO Wes Bush has said that it cannot submit a bid for the KC-X Program, and thus will be forced to drop out of contention for the Air Force tanker.

Consequently, shares of Northrop spiked lower minutes ago -- falling as much as a half percent -- but have now bounced and are just slightly lower at $55.19. On the other side of the trade, shares of Boeing (NYSE: BA) began moving higher amid the news but are now just about flat around $53.62.